(Those receivables paid off, but Doernberg eventually dropped the client).
"Sure, we've had impairment of assets and receivables write-offs," said David L. Calhoun, president of GE Transportation, which includes the company's aircraft-engine business.
You've identified ten areas to look closely to identify possibly shaky earnings: options, cash flow, inventory, sales/share, investment income, pension plans, taxes, goodwill, receivables, and off-balance sheet debt.
For the next two years, I spent six days a week collecting the company's receivables and selling off the inventory so that I could pay down the bank debt.
Debt buyers buy these "written-off" receivables for pennies on the dollar, and then go out to the collections industry to sell them off at a profit.
And then once the product is shipped and invoiced, an accounts receivable lender pays off the purchase order lender, and assumes the invoice.
Because the account receivable is paid off by a high credit level enterprise.
Citi held some $200 million in Parmalat receivables in an off-balance-sheet entity known as a conduit.
In September 2000 WorldCom took a charge of $685 million to write off bad receivables and has a remaining bad-debt reserve of $1 billion against $6.3 billion in gross receivables.
As soon as the products ship and there is an invoice, an accounts-receivable financing company pays off the purchase-order financing company.
